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Federal income tax returns for the years in issue.
During 1983 or 1984, petitioner and Ms. McNamara3 organized
the corporation.4 The corporation engaged in the business of
installing heavy machinery and equipment used by its customers in
their manufacturing businesses. The corporation maintained a
business checking account at PSFS Bank.
During the years in issue, all of the outstanding shares of
the corporation’s common stock were held in Ms. McNamara’s name.
Both petitioner and Ms. McNamara considered petitioner to be at
least a part owner of the corporation during the years in issue.
Petitioner and Ms. McNamara decided to issue all of the
corporation’s stock to Ms. McNamara for various business and
personal reasons. Petitioner stated to respondent’s agents that
he and Ms. McNamara had the corporation’s common stock issued to
Ms. McNamara because the regulations of the union of which
petitioner was a member prohibited its members from owning
corporate stock.
During the years in issue, petitioner and Ms. McNamara were
employees of the corporation. Petitioner considered his position
in the corporation equivalent to that of a chief executive
officer, and he made all significant business decisions for the
3 At the time the corporation was organized, Ms. McNamara
was known as Bonnie E. Moran.
4 The corporation also did business as Moran General
Contractors, Inc.
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Last modified: May 25, 2011